- Joined
- Oct 27, 2009
- Messages
- 1,210
Since "success" is in the eye-of-the-beholder I decided to call this a simple "story".
As some may know, I only invest in U.S. stocks and real estate (currently only in Toronto and Phoenix, AZ). 2012 has been very disappointing as all opportunities have dried up in both of these markets.
I have no expertise in any other market so I am sure that I am limiting myself, but I feel that it is better to be somewhat good at picking assets in one or two classes rather than being mediocre or poor at picking assets in dozens of classes.
This year's success has been primarily centered around raising my baby daughter as there is nothing in the U.S. stock market or real estate to distract me. Perhaps this is how it was supposed to be. Who knows. It worked out.
After taking a pause last year, the U.S. stock market took off again in 2012. YTD returns (excluding dividends) are as follows:
NASDAQ +17.6%
S&P500 +12.6%
DOW +8.5%
Chuong +10.8%
Since I've been benchmarking myself against the S&P500 for the last 15 years or so, this puts me behind with a little over 4 months to go. Again, my return has been based on doing nothing - buying nothing and selling nothing. I've had no more than 6 companies in my portfolio for the last one and a half decade. Again, I don't feel that there is any point to holding more. I'm definitely not able to keep track of more myself, but that's just me. Besides, compounding 6 companies at double digit returns for 15 years seems to build up the net worth very pleasantly.
Going into 2012 I was hoping to really push into Phoenix, AZ with a lot more buying. The idea was to literally double down on what I had already purchased in 2010 and 2011. However, fate had other plans as the door closed firmly before the end of 2011 as prices literally took off. Even though rents are rising as well (it is odd to have both prices and rents rise, but I'll take it), they are not rising fast enough to make these properties worthwhile as investments at current prices. Gross rental yields have moved from over 20% to 14%. A 14% gross rental yield (7% net before taxes) is not worth it for me.
Each property that I hold in Pheonix, AZ is generating a little less than $400 per month before tax. It is nice to know that by waiting for the right opportunity, I generate with one door what some people do with 4 or even 8 doors. Even after taking off half my gross revenue for expenses. And with far less risk since I haven't needed to employ a cent of debt.
The properties have also increased in value by 15%-20% over the last year or so. That is somewhat irrelevant since I'm not selling. However, it may come into play if I decide place liens on them.
In my history as a small investor I have always encountered resistance to what I do. Mostly because I take advantage of painful situations. When prices fall, I make an appearance and take assets from panicked investors looking to throw them away. It probably doesn't help that I'm very happy as I'm doing this either.
In addition to panic, many around me also feel that I'm making a big mistake going into what they perceive as an inferno. However, I don't see it that way - the harder the price falls, the faster I see risk fade away. I never understood why people were MORE cautious when prices fell by 75% to $40 p sq ft. It boggled my mind. I felt that the risk just evaporated by 99%. I just don't think I'll ever understand the average person in this regard.
Vice versa. When prices are consistently rising, I become more agitated and fearful. It is what it is.
All I know is that buying during really bad times has made me a lot of money and I'm loathe to go against my encouraging short-term results.
When I face resistance to what I am doing, I often am reminded by a multi-millionaire that I had the fortune of meeting. He was far wealthier than I will ever be, and he said, "F-them and F-their opinions. Opinions are irrelevant. All that matters is results. Results man. What are their results in that market? If they don't have results, their opinions are worth sh-t."
Not very eloquent, but it made me laugh. However, a more refined and elegant quote that I also use to remind myself is this:
"Do just once what others say you can't do, and you will never pay attention to their limitations again."
So I will.
As some may know, I only invest in U.S. stocks and real estate (currently only in Toronto and Phoenix, AZ). 2012 has been very disappointing as all opportunities have dried up in both of these markets.
I have no expertise in any other market so I am sure that I am limiting myself, but I feel that it is better to be somewhat good at picking assets in one or two classes rather than being mediocre or poor at picking assets in dozens of classes.
This year's success has been primarily centered around raising my baby daughter as there is nothing in the U.S. stock market or real estate to distract me. Perhaps this is how it was supposed to be. Who knows. It worked out.
After taking a pause last year, the U.S. stock market took off again in 2012. YTD returns (excluding dividends) are as follows:
NASDAQ +17.6%
S&P500 +12.6%
DOW +8.5%
Chuong +10.8%
Since I've been benchmarking myself against the S&P500 for the last 15 years or so, this puts me behind with a little over 4 months to go. Again, my return has been based on doing nothing - buying nothing and selling nothing. I've had no more than 6 companies in my portfolio for the last one and a half decade. Again, I don't feel that there is any point to holding more. I'm definitely not able to keep track of more myself, but that's just me. Besides, compounding 6 companies at double digit returns for 15 years seems to build up the net worth very pleasantly.
Going into 2012 I was hoping to really push into Phoenix, AZ with a lot more buying. The idea was to literally double down on what I had already purchased in 2010 and 2011. However, fate had other plans as the door closed firmly before the end of 2011 as prices literally took off. Even though rents are rising as well (it is odd to have both prices and rents rise, but I'll take it), they are not rising fast enough to make these properties worthwhile as investments at current prices. Gross rental yields have moved from over 20% to 14%. A 14% gross rental yield (7% net before taxes) is not worth it for me.
Each property that I hold in Pheonix, AZ is generating a little less than $400 per month before tax. It is nice to know that by waiting for the right opportunity, I generate with one door what some people do with 4 or even 8 doors. Even after taking off half my gross revenue for expenses. And with far less risk since I haven't needed to employ a cent of debt.
The properties have also increased in value by 15%-20% over the last year or so. That is somewhat irrelevant since I'm not selling. However, it may come into play if I decide place liens on them.
In my history as a small investor I have always encountered resistance to what I do. Mostly because I take advantage of painful situations. When prices fall, I make an appearance and take assets from panicked investors looking to throw them away. It probably doesn't help that I'm very happy as I'm doing this either.
In addition to panic, many around me also feel that I'm making a big mistake going into what they perceive as an inferno. However, I don't see it that way - the harder the price falls, the faster I see risk fade away. I never understood why people were MORE cautious when prices fell by 75% to $40 p sq ft. It boggled my mind. I felt that the risk just evaporated by 99%. I just don't think I'll ever understand the average person in this regard.
Vice versa. When prices are consistently rising, I become more agitated and fearful. It is what it is.
All I know is that buying during really bad times has made me a lot of money and I'm loathe to go against my encouraging short-term results.
When I face resistance to what I am doing, I often am reminded by a multi-millionaire that I had the fortune of meeting. He was far wealthier than I will ever be, and he said, "F-them and F-their opinions. Opinions are irrelevant. All that matters is results. Results man. What are their results in that market? If they don't have results, their opinions are worth sh-t."
Not very eloquent, but it made me laugh. However, a more refined and elegant quote that I also use to remind myself is this:
"Do just once what others say you can't do, and you will never pay attention to their limitations again."
So I will.